TaxTMI 
TaxTMI 
2021 (10) TMI 1041
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.... of advances for agricultural land as shown by the assessee. despite the assessee failed to provide necessary evidences to prove the genuineness or transactions and creditworthiness of the persons giving advances. 2. Whether on the facts and in the circumstances or the case, Ld. CIT (A) is justified in deleting the additions of Rs. 1,59.30.060/- made u/s 68 of the I.T. Act in respect of unsecured loan from various persons, even though their creditworthiness was not proved. 3. Whether on the facts and in the circumstances of the case, , Ld. CIT (A) is justified in deleting the additions of Rs. 10,18.500/- on account or disallowances or interest on property claimed by the assessee by holding that similar claim made by the assessee was allowed in subsequent year. 4, Whether on the facts and in the circumstances or the case, Ld. CIT (A) is justified in deleting the additions of Rs. 9,15.600/- on account of disallowances or claimed of interest out of income from other sources. by holding that similar claim made by the assessee was allowed in subsequent year. 5. Whether on the facts and in the circumstances or the case Ld. CIT (A) is justified in holdi....
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....the I.T. Act to the total income of the assessee as undisclosed income. 5. Being aggrieved, the assessee challenged the action of the Assessing Officer before the ld. CIT(A) who called for the remand report and after having gone through the facts/circumstances, material and submissions thereof deleted the addition. The Operative part/findings recorded by the ld. CIT(A) are reproduced hereunder: "..........The appellant during the course of hearing filed copy of confirmation letter as filed before the assessing officer, copy of affidavit and copy of registry in respect of land actually sold and registered in the name of Shri Rakesh Agrawal. These papers were forwarded to the assessing officer but the assessing officer in his remand report re-iterated the same facts as stated in the assessment order. The appellant during the course of hearing furnished complete details in respect of advances as received by him against the sale of Agricultural land through cheques and also in cash, details of landsold to Shri Rakesh Agrawal including the registry as provided which was also made available to the assessing officer mentioning the details of cheques as actually received by the....
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....received was shown to have been adjusted. The ld. CIT(A) called for a remand report from the Assessing Officer on these documents filed during the course of appellate proceedings. The Assessing Officer submitted remand report dated 05-04-2017 which is filed on page nos. 187-193 of the paper book. On perusal of the remand report, the ld. CIT(A) found that the Assessing Officer did not comment on any of the documents filed by the assessee during the course of the appellate proceedings rather the Assessing Officer simply reiterated the findings of the then Assessing Officer. Thus, it is clear that the assessee filed ample documentary evidences to establish the identity and creditworthiness of Shri Rakesh Agrawal and genuineness of the transaction entered into with him. Therefore, we are of the view that ld. CIT(A) was right in recording that the Assessing Officer failed to controvert the genuineness of the transaction and identity as well as creditworthiness of the said party. Before us too, the ld. Counsel for the assessee filed the following documents in support of the action of the ld. CIT(A): S. No Description of documents Page No. of Paper Book 1 Copy of confirm....
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....ri Rakesh Agrawal and the entire particulars of these advances were duly mentioned in the registered sale deeds as well. Thus, there was no justification for adding the amount of these advances to the total income of the assessee u/s 68 of the Income-Tax Act, 1961. So far as the case-laws cited by the Assessing Officer are concerned, we find that these are not applicable to the facts of the present case since the same deal with receiving of unsecured loan by an assessee and in the present case, no unsecured loan was received by the assessee from Shri Rakesh Agrawal rather the assessee received advance against sale of land from Shri Rakesh Agrawal which was subsequently adjusted against sales made to Shri Rakesh Agrawal and this fact was duly verifiable from the registered sale deeds executed subsequently. It is a settled position of law that no addition is called for u/s 68 of the Income-Tax Act, 1961 in respect of advances (cash credits) found recorded in the books of accounts which are subsequently adjusted against sales. It is also a well settled proposition of law that no addition is sustainable on account of advance received which stands duly reconciled against different sale ....
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.... "5. The Assessee has three manufacturing Units, i.e. Malanpur, Jammu and Noida. The original income declared was 'Nil' for the relevant Assessment Years. A search and seizure operation was conducted in respect of M/s. Flex Group of Companies on 23.02.2006, which led to the notice being issued under Section 153A of the Act to the Assessee. In the course of search assessment proceedings, the Assessing Officer added the sum of Rs. 2.32 crores, which the Assessee claim towards trade credit. The CIT(Appeal) directed deletion of this amount after due verifications of the record by expressing his satisfaction that the credits claimed were genuine and in accord with the documents and the records produced by the Assessee. The CIT's findings are as follows :- "10.3 I have carefully considered the facts of the case, submissions made by the appellant and remand report submitted by the A.O. It is observed that the appellant could not file the confirmations from the trade customers from whom the advance against sale is received in this year and in the absence of confirmations, the A.O. treated the amount of Rs. 2,32,13,640/- as income of the appellant under Section 68 of th....
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....f the above facts and discussion thereof in the light of the judicial precedents (supra), we are of the view that the additions of Rs. 85,00,000/- and Rs. 1,07,51,000/- as made by the Assessing Officer on account of advance received against sale of land by invoking the provisions of section 68 of the Income-Tax Act, 1961 were unjustifiable since the amount of advances received by the assessee were subsequently adjusted against the sales made by the assessee and the same was also verifiable from the registered sale deeds. Thus, the Assessing Officer was not justified in treating the amount of advance received by the assessee as his income as the Assessing Officer failed to consider the fact that the assessee had sold agricultural land belonging to him to Shri Rakesh Agrawal in lieu of consideration which included the amount of advance received from the said party. Accordingly, we are of the view that the additions of Rs. 85,00,000/- and Rs. 1,07,51,000/- made by the Assessing Officer were rightly deleted by the Ld CIT(A). We confirm the order of the ld. CIT(A) on this issue. Therefore, ground no.1 raised in the appeal of the Revenue is dismissed. 12. Second ground raised by the R....
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.... The documents as filed by the appellant were referred to the assessing officer for his comments but nothing new was submitted by him. The appellant has filed copy of confirmation letter, copy of ledger of the loan creditor in his books of account and has also filed copy of bank account of the loan creditor wherein the amount as advanced to the appellant was duly reflected. On perusal of the bank account of the loan creditor, it is also clear that no cash was deposited prior to issuance of the cheques to the appellant. The appellant therefore discharged the onus lying on him and no contrary finding was given by the assessing officer on these documents even in remand proceeding. I, therefore, direct the assessing officer to delete the addition of Rs. 5,00,000/- as made to the total income of the appellant. 4.4.2] SMT MANISHA MAURYA OF Rs. 18,00,000/-. The appellant had received loan of Rs. 18,00,000/- from Smt Manisha Maurya during the course of assessment proceeding.Copy of her ledger account in the books of the appellant was filed. The amount was added to the total income of the appellant by stating that PA No and address of the loan creditor was not provided. Th....
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....e of the appellant by invoking the provision of section 68 of the Act by stating that only copy of ledger was filed without PAN No and address. The appellant during the course of appellate proceeding filed copy of account of the appellant in the book of Shri Mangal Murti Tradex P Limited and contra account in the book of the appellant, Copy of Bank statement of M/s Shri Mangal Murti Tradex P Limited with Bank of Baroda, Copy of computation of Income and audited final account. The documents as filed by the appellant were forwarded to the assessing officer but in the remand report nothing new was submitted by him. On perusal of the copy of account of the appellant in the book of that company it is clearly evident that an amount of Rs. 21,05,056/- was received at the beginning by the appellant but at the end an amount of Rs. 56,86,839/- was due to theappellant. The amount as due from M/s Shri Mangal Murtee Tradex P Limited was shown as loans & advances in the book of the appellant. The assessing officer added two cheques as received from this company by invoking the provision of section 68 of the Act. The appellant from the ample documents as filed has duly discharged the onus lying o....
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....m, it is clearly evident that an amount of Rs. 1,65,682/- was due to the appellant at the beginning and at the end an amount of Rs. 2,18,833/- was payable by the appellant. The appellant let-out his premises to the said firm for use of office and also to run Hostel by it. The amount as due from the appellant was also reflected in its final account as receivable from the appellant. The two cheques as received by the appellant from the firm was added to the total income of the appellant which was neither proper nor correct to pick isolated one or two transactions from whole copy of account. The amount as issued in the name of the appellant was duly reflected in the bank account of that firm and source of the same is also clear from the Bank statement. The appellant from the ample documents as filed duly discharged onus lying on it. Hence, the assessing officer was not justified in adding an amount of Rs. 32,00,000/- to the total income of the appellant. I, therefore, direct the assessing officer to delete the addition of Rs. 32,00,000/- made to the total income of the appellant. 4.4.7]M/s JAIN INFRATECH , INDORE OF Rs. 29,70,000/- The assessing officer during the co....
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.... relied upon the order of the Assessing Officer and submitted that since the assessee failed to furnish the sufficient documents in respect of the parties from whom unsecured loans were taken during the year, the Assessing Officer was right in observing that the assessee failed to prove the genuineness of the transaction, identity and creditworthiness of the depositor with corroborative evidences. On the other hand, ld. Counsel for the assessee, reiterating the submissions made before Revenue Authorities, relied upon the order the ld. CIT(A) and submitted that the Assessing Officer made addition not only in respect of the amount of unsecured loans received during the year but also in respect of the amount received back during the year against the amount initially advanced to the group concerns which is unjustified. The Assessing Officer failed to appreciate the fact that the addition comprised of the amount received from unsecured loan creditors, amount received as advance against land and amount received from parties to whom loans and advances were given. The assessee filed various documentary evidences before ld. CIT(A) in support of this explanation and the ld. CIT(A) called for....
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.... received from parties to whom loans and advances were given. We further find that the assessee during the course of first appellate proceedings filed various documentary evidences including confirmation of accounts, ledger extracts, income-tax acknowledgment, bank statement and statement of affairs/ audited financial statements of these parties so as to justify the identity and creditworthiness of these parties and genuineness of the transactions as entered into with them and therefore, the ld. CIT(A) called for a remand report from the Assessing Officer on these documents filed during the course of appellate proceedings. Thereafter, the Assessing Officer filed remand report dated 05-04- 2017 which is filed before us at page nos. 187-193 of the paper book. On perusal of the remand report, we find that the Assessing Officer did not comment on any of the documents filed by the assessee during the course of the appellate proceedings rather the Assessing Officer reiterated the findings of the then Assessing Officer. Thus, it is clear that the Assessing Officer failed to controvert the genuineness of the transaction and identity as well as creditworthiness of these parties. The followi....
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.... Copy of audited financial statements of the company for the year ended 31st March, 2010 wherein the amount payable to the assessee is duly reflected [Page No. 124] 114-129 5 Vijit Ramavat [PAN: ADUPR0676G] - Addition of Rs. 25,00,000/- 5.1 Copy of confirmation of accounts of the unsecured loan creditor 130 5.2 Copy of ledger account of the unsecured loan creditor in the books of the assessee 131 5.3 Copy of bank statement of the unsecured loan creditor duly highlighting the amount as advanced to the assessee 132 6 The IESM Academy [PAN: AAEFT4206F] - Addition of Rs. 32,00,000/- 6.1 Copy of ledger account of the creditor in the books of the assessee 133-134 6.2 Copy of ledger account of the assessee in the books of the creditor 135-136 6.3 Copy of acknowledgment of income-tax return along with computation of income of the creditor for the Assessment Year 2010-11 137-139 6.4 Copy of final accounts of the creditor for the year ended 31st March, 2010 wherein the amount receivable from the assessee is duly reflected [Page ....
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....) Ltd. as reported in [2015] 373 ITR 115 (Madras)(Mag.) 16. In view of the above discussion in the light of the judicial pronouncements (supra), we are of the view that the addition of Rs. 1,59,30,060/- as made by the Assessing Officer on account of unsecured loans received during the year by invoking the provisions of section 68 of the Income-Tax Act, 1961 was not justified and was rightly deleted by the ld. CIT(A) as the assessee filed requisite documentary evidences so as to justify the identity and creditworthiness of these parties and genuineness of the transactions as entered into with them. Thus, we confirm the order of the ld. CIT(A) on this point. Accordingly, ground no.2 raised in the appeal of the Revenue is dismissed. 17. Ground nos. 3 & 4 raised by the Revenue are with regard to deletion of additions of Rs. 10,18,580/- made on account of disallowance of interest out of property income and Rs. 9,15,600/- made on account of disallowance of interest out of income from other source. Facts as culled out from the orders of Revenue Authorities are that the assessee took mortgage loan and home loan from ICICI Bank and State Bank of India which were used towards repayment....
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.... Self-occupied property at Old Palasia 1,50,000 Total 10,18,580 18. Being aggrieved, the assessee challenged the action of the Assessing Officer before the ld. CIT(A) having gone through the facts/circumstances, material and submissions thereof deleted the addition. The relevant portion of the order of the ld. CIT(A) are reproduced hereunder: "5] GROUND No 6 5.1] The assessee in this ground of appeal has challenged the disallowance of Interest of Rs. 10,18,580/- out of property Income. 5.2] The assessee had claimed deduction for interest of Rs. 26,52,018/- under the head of Income from House property. The assessing officer has disallowed claim for Rs. 10,18,580/- by stating that whether interest bearing funds were used by the assessee was not clear. 5.3] The detail of cost of assets and corresponding interest as claimed by the assessee is as under:- S.No Description of the Property Cost of the Property Interest claimed Interest Disallowed 1 13-14, Dhenu Market 3892340 467080 467080 2 12, Dhenu Market 845890 101500 101500 ....
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....ken from ICICI Bank Ltd. and State Bank of India have been filed on Page No. 161-174 of the paper book so as to justify the amount of interest paid and claimed as deduction during the year under consideration. In view of these facts, it is clear that the disallowance of Rs. 10,18,580/- made by the Assessing Officer was unjustified as the borrowed funds were utilized towards purchase of the properties which were let-out and rental income earned therefrom was offered for tax under the head 'Income from House Property' and more so when such deduction on account of interest was allowed in the preceding as well as subsequent years. Therefore, we do not find any reason to interfere with the order of the ld. CIT(A) on this point. Accordingly, ground no.3 raised in the appeal of the Revenue is dismissed. 21. So far as ground no.4 with regard to addition of Rs. 9,15,600/- on account of interest claimed under the head 'Income from Other Sources' is concerned, the Assessing Officer observed that the assessee failed to prove the direct nexus of funds borrowed and advanced to the parties from whom interest income was earned. Accordingly, the Assessing Officer disallowed an amount of Rs. 9,15....
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....rd rival contentions of both the parties and perused material available on record. We find that as observed by us above, the assessee utilized the borrowed funds towards repayment of the loans taken earlier for purchase of the properties let-out by the assessee and also for the purpose of advancement of loan to other parties from whom interest income was earned and during the course of assessment proceedings, the assessee filed copy of account of the parties to whom loans were advanced and from whom interest income was earned and offered for tax under the head 'Income from Other Sources'. Thus, the assessee categorically explained that the amount borrowed was advanced to these parties and therefore, interest paid on the borrowed funds was rightly claimed as deduction against the interest income earned and offered for tax under the head 'Income from Other Sources'. We find that the assessee claimed deduction on account of interest paid on the borrowed funds only to the extent of interest income earned from the parties and offered for tax under the head 'Income from Other Sources' and the deduction claimed on account of interest paid against the income offered for tax under the head ....
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.... treatment of Agricultural income as given by the assessing officer as income from other sources. The appellant during the course of hearing and also during the appellate proceeding provided detail of Agricultural land given on Batai for Rs. 8,14,000/- to various persons. The detail contain name of the person to whom lands were given on Batai, Name of village where agricultural land was situated, area of land and the amount actually received by the appellant. The appellant has consistently shown Agricultural income which was duly accepted by the assessing officer, year-wise detail of Agricultural Income as shown by the appellant and as accepted by the assessing officer is as under:- S.No Particulars 2009-10 2010-11 2011-12 2012-13 1 Agricultural income as shown 382000 814000 501400 9,00,000 2 Agricultural income as accepted 382000 NIL 501400 8,00,000 Considering the overall facts of the case and on perusal of the above table, it is clear that the appellant owned Agricultural land which was not disbelieved by the assessing officer himself. Hence, to meet the end of justice, I hereby direct the assessing officer to accept....
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....3 1 Type of assessment Regular assessment -Section 143(3) Regular assessment - Section 143(3) Summary assessment - Section 143(3) Regular assessment -Section 143(3) 2 Agricultural income shown 3,82,000 8,14,000 5,017,400 9,00,000 3 Agricultural income accepted 3,82,000 NIL 5,01,400 8,00,000 4 Agricultural income not accepted NIL 8,14,000 NIL 1,00,000 29. On consideration of above facts, it is clear that non-acceptance of agricultural income of Rs. 8,14,000/- shown by the assessee in his income-tax return was unjustified more so when agricultural income was shown by the assessee on a year-to-year basis and such agricultural income had also duly been examined and accepted in the preceding as well as subsequent years. Thus, we direct the Assessing Officer to accept the agricultural income in full i.e. Rs. 8,14,000/-. Accordingly, ground no.5 raised in the appeal of the Revenue is dismissed whereas ground no.2 raised in the assessee's Cross-objection is allowed. 30. Ground No.6 raised in the appeal of the Revenue is with regard to deletion of addition of Rs. 18,99,796/- made by the Assessing Officer on accoun....
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....Being aggrieved, the Revenue is in appeal before this Tribunal. 32. Ld. CIT-DR relied upon the order of the Assessing Officer. On the other hand, ld. Counsel for the assessee, reiterating the submissions made before Revenue Authorities, relied upon the order the ld. CIT(A). 33. We have heard rival contentions of both the parties and perused material available on record. We find that the assessee categorically submitted during the course of assessment proceedings that the broker, Arihant Capital Market Ltd. debited the amount of late payment charges on the amount which remained outstanding on account of F & O Trading and purchase of shares and securities. The assessee had also submitted that the said entries were unilaterally passed by the broker and as such, there was no occasion for the assessee to deduct TDS on the amount of late payment charges. Further, we find that the amount of late payment charges unilaterally debited by the broker were reversed by the broker itself in the subsequent year i.e. during the previous year 2010-11 relevant to the Assessment Year 2011-12 and were accordingly offered for tax by the assessee in that year. Thus, we are of the view that there wa....
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.... - Trib.) ACCME (Urvashi Pumps) Eng. (P.) Ltd. v. JCIT (OSD) Circle-4 Jaipur - [2018] 90 taxmann.com 189 (Jaipur - Trib.) Dilip Kumar Roy v. ITO, Ward-1, Nadia - [2016] 68 taxmann.com 129 (Kolkata - Trib.) New Alignment v. ITO, Ward-51(4), Kolkata - [2016] 69 taxmann.com 122 (Kolkata - Trib.) Punjab Goods Transport (P.) Ltd. v. ITO, Ward-12(3), Kolkata - [2017] 77 taxmann.com 37 (Kolkata - Trib.) Brijgopal Madhusudan Bhattad v. ITO, Khamgaon - [2015] 61 taxmann.com 266 (Nagpur - Trib.) 34. On consideration of above facts and discussion in the light of the above judicial pronouncements, we are of the view that second proviso to section 40(a)(ia) of the Act shall have retrospective effect from 01-04-2005 and in the present case, the relevant assessment year is the Assessment Year 2010-11 and the benefit of the second proviso to section 40(a)(ia) of the Act shall be available to the assessee as the assessee had obtained and furnished the certificate of the CA of the broker wherein it has been clearly certified that the amount on which TDS not deducted by the assessee was included in the total income of the payee and requisite amounts of ....
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....refore have no hesitationin confirming the addition of Rs. 2,00,000/- as made by the assessing officer. This ground of appeal is dismissed." Being aggrieved, the assessee is in Cross-objection before this Tribunal. 33. ld. Counsel for the assessee, reiterating the submissions made before Revenue Authorities, submitted that assessee had initially advanced an amount of Rs. 2,00,000/- to Shri Tarun Dassani which was returned back by him on the very next day and as such, there was no justification for taxing the amount of Rs. 2,00,000/- under section 68 of the Income-Tax Act, 1961. On the other hand, ld. CIT-DR relied upon the orders of the Revenue Authorities. 34. We have heard rival contentions of both the parties and perused material available on record. We find that the assessee, during the course of assessment and first appellate proceedings, submitted that he had initially advanced an amount of Rs. 2,00,000/- to Shri Tarun Dassani which was returned back by him on the very next day and both these entries were inadvertently posted in two different accounts as is evident from perusal of copy of ledger account of Shri Tarun Dassani in the books of accounts of the assessee f....